Alphabet Inc. reported stronger-than-expected results for its second quarter, with revenue growing 24% to $119.8 billion, up from $96.43 billion in the same period last year. The company earned $112.11 billion, or $9.11 per share, exceeding the average analyst revenue expectation of $117.06 billion. Following the announcement, Alphabet's shares climbed to $344.62 in after-hours trading.
The company’s massive artificial intelligence spending spree is paying off, with growth appearing across its businesses. The cloud division experienced an 82% jump, buoyed by strong global enterprise demand for cloud computing services. Alphabet noted that cloud revenue far surpassed Wall Street expectations, while its backlog of contracted business ballooned to more than $500 billion.
CEO Sundar Pichai stated that AI investments are redefining what is possible across every part of the business. To secure an edge in the AI race, Alphabet projected that full-year capital expenditures in 2026 will reach between $195 billion and $205 billion. However, the company also reported that its free cash flow turned negative.